Amid increasing pressure to balance agriculture with conservation, NSW farmers now have an opportunity to contribute to biodiversity while generating extra income. Through the NSW Biodiversity Scheme, farmers can create biodiversity credits by preserving and managing native vegetation on their land. These credits can then be sold to developers needing to offset the ecological impact of their projects, creating a voluntary market that rewards land stewardship.
Understanding Biodiversity Credits
Biodiversity credits represent the ecological value of preserving specific vegetation or habitat. These credits are typically created under a Biodiversity Stewardship Agreement (BSA), a legal agreement between the landholder and the NSW Government. There are two main types of credits:
- Ecosystem credits – based on vegetation types or threatened ecological communities.
- Species credits – tied to the presence of particular threatened species and their habitat needs.
These credits are calculated using the Biodiversity Assessment Method (BAM), a scientific framework that evaluates the ecological condition and significance of a site. Once the credits are created, landholders can sell them to developers who are required to offset the environmental loss resulting from their construction or land-clearing projects.
The Benefits for Farmers
For many farmers, biodiversity credits offer more than just environmental satisfaction, they offer financial reward. Farmers can earn income through credit sales while continuing to graze livestock or perform low-impact farming. A farmer near Walgett, for instance, has reported earning approximately $22,000 annually through the Biodiversity Conservation Trust by preserving native riparian zones on their land.
Beyond the income, participating farmers often see benefits such as improved soil quality, reduced erosion, and better water retention. These environmental benefits can lead to more sustainable and resilient agricultural practices over the long term.
How It Works
The process of generating and selling biodiversity credits in NSW generally follows these steps:
Assessment and Agreement
- A site is assessed using the BAM to determine its biodiversity value.
- A Biodiversity Stewardship Agreement is established to protect and manage the area.
Credit Creation and Management
- Credits are issued based on the site’s ecological features.
- The landholder receives payment through credit sales and manages the land according to the BSA.
Ongoing Stewardship
- A portion of the credit income is invested into a Total Fund Deposit to ensure long-term management.
- The Biodiversity Conservation Trust can support the landholder with management plans and compliance.
Challenges and Recent Reforms
Despite its potential, the scheme has faced criticism. A 2023 audit found that more than 30% of assessed sites saw no measurable improvement, and some even deteriorated. Issues like pricing transparency, scheme complexity, and a perceived conflict of interest in assessments led to public concern.
In response, the NSW Government introduced reforms in late 2024 to address these shortcomings. These reforms included:
- Enforcing stronger transparency measures in credit pricing and trade.
- Clarifying offset rules to prioritise avoiding harm rather than simply compensating for it.
- Establishing independent oversight to ensure ecological outcomes are met.
These changes are designed to rebuild confidence in the program and ensure genuine environmental gain from the scheme.
Market Outlook and Federal Alignment
The biodiversity credit market in NSW is still developing, but with rising demand for offsets, especially near urban growth corridors and renewable energy zones, the outlook is promising. Additionally, Australia’s national EPBC Act also mandates biodiversity offsets for developments impacting Matters of National Environmental Significance (MNES), which means farmers could tap into both state and federal credit markets.
The NSW Government is also working on a State Nature Strategy, which is expected to map out high-value biodiversity areas and improve credit forecasting tools for landholders.
Getting Started: Tips for NSW Farmers
For farmers interested in participating, here are a few practical steps:
- Attend a workshop hosted by NSW Farmers or the Credits Supply Taskforce.
- Get a preliminary ecological assessment to understand your site’s credit potential.
- Use government dashboards to monitor market demand and pricing trends.
- Consult with a biodiversity assessor or local land services for technical advice.
- Start early,credits from well-managed sites with high ecological value can attract premium buyers.
Conclusion
Biodiversity credits represent an innovative way for NSW farmers to align agricultural activity with environmental preservation. While the scheme isn’t without its challenges, the recent reforms and market potential make it a promising path for those willing to invest time and effort into land stewardship. By protecting nature, farmers are not just helping the planet,they’re also securing long-term, diversified revenue.
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